August 24, 2017

Archives for December 2007

Will Lehman lead the way?

What a day. The market opened with an enormous gap higher after a very poor outing the prior session. However,the gains did not last long as the market moved steadily lower throughout the day, that is until the last half hour of trading when the bulls managed to rally the market higher. The key level to watch remains the 1490 area on the S&P. Overhead resistance could pose a threat to the bulls. If the market moves lower I would watch the 1460 level of the S&P. This area could act as decent support. If that doesn't hold I think we are back where we began the December expiration cycle at the 1440 level. With only 6 days left until SPX settles (at the open Friday) the Iron Condor strategy looks to make another 7.9% during this … [Read more...]

Will we see the gaps close?

Not much to say today.   The overbought market came tumbling back into a neutral state immediately following the Fed announcement today. Typically, after such a large drawdown we will see continued downside momentum over the short-term. In this instance I have to side with the historical norm due to the  two upside gaps that occurred on 12/5 and 11/27. Gaps tend to weigh heavily on the market and the two mentioned are no expection. My hope is that the market can quickly push into an oversold state so that I can possibly take advantage of a short-term bounce before the year ends. The pullback also moved the underlying S&P (SPX) closer to the midpoint of our range for the Iron Condor strategy. Amazingly after all of the volatility … [Read more...]

Bulls continue to amaze, but for how long?

The recent rally has more legs than I anticipated. However, the four day rally has pushed the indices near an extreme level so the probability of a shorter-term reprieve increases that much more. Of course, with the Fed release tomorrow who knowsa what to expect. Certainly, the market looks stretched at this point, but over the short-term we could easily see a push into "very overboguht" territory if the bulls like the report tomorrow. I still think there are quite a few short-term bearish indicators rearing their ugly heads and I can't help but be alarmed. The problem tomorrows swings will be wild and I do not plan on gambling as to which side will win. Patience, patience, patience. One thing is for certain the market will always offer … [Read more...]

Will the recent rally last?

There really isn't much to write about tonight. The markets held steady today and for the most part finished the day flat. My how many are quick to jump on the bullish bandwagon. I am a range-bound trader (who also trades market extremes) and for the most part so it really doesn't matter to me which way the market moves as long as my underlying of choice doesn't move sharply in one direction. Sure, the bulls have stepped up over the short-term, but the gap up yesterday put the major indices in a "overbought" state and typically a move like that is faded over the short-term. This could be the exhaustion gap that many traders have awaiting. Furthermore, in many cases, the initial reaction after the jobs report is often faded, which … [Read more...]

Late Post or Would That Be Early Post?

I apologize for the late post. I know many of you use the Overbought/Oversold measures on a daily basis so lets get to it. All of the major indices we follow are back in an overbought state. It will be intersting to see how the market reacts after the jobs report is released this morning. As always I expect to see some whipsaw shortly after the opening bell, but any move upwards will most likely be given back. Of course, there are no guarantees in the world of trading, but given the short-term negative seasonal conditions coupled with overbought status in all of the major indices, (not to mention the upside gap from two days ago that has yet to close) and a short-term reprieve looks probable. After the bell today I will present the … [Read more...]

S&P Remains Range Bound

I am still not as sold as everyone else over the move today (although the futures sure look great as I write this). We are still range bound with strong resistance lingering overhead (1490 in the S&P). Until the S&P can make a move above that level and sustain itself there I am not confident in a sharp move higher. Of course all of this speculation will end shortly and no one really knows what is in store for the future. What we can decipher from the market is that nothing has changed. A nice move today, certainly, but we saw something similar to this a few days ago and the gap closed several trading days later. As I stated in my prior post the market is faced with the following over the short-term: According to the Stock Trader’s … [Read more...]

Still Range Bound, But For How Long?

The S&P has moved back into the middle of the range and will most likely stay there until the either the payroll report Friday or the Dec. 11 Fed release. Our short-term overbought/oversold measures are moving back near oversold territory, but that doesn't mean the move lower has ended. There is still room to the downside roughly 1440-1450 which is right at the support levels that I have mentioned in the last few posts. A move to that level and my guess would be that the Bulls will step in with some force. As to whether or not the short-term bounce leads to a "Santa Claus", well, that is up to Mr. Market to decide. The move lower has moved the underlying SPX back towards the middle of our 300 point range in the Iron Condor strategy. A … [Read more...]

December Iron Condor and Market Outlook

I hope all of you had a wonderful weekend. The Ducks fell to the lowly Beavers Saturday to the dismay of yours truly. A few weeks ago I was calling about rooms for the National Championship. Anyway, enough of that, lets get down to business. With 17 days left until options expiration,our SPX December Iron Condor position looks promising. Our 300 point range has allowed for an enormous bout of volatility and yet we wil lstill make 7.9% for the expiration period (four weeks) if the underlying SPX expires between 1590 and 1290 on the SPX. Currently SPX would have to rally 8% or decline 12.4% over the next 17 days before our position is in jeopardy of taking a loss. I hate to keep repeating this, but since our last loss and significant … [Read more...]